Budget 2024 live: Keir Starmer to warn UK must be ‘realistic’ in speech ahead of expected tax hikes

Rachel Reeves will announce Labour’s first Budget in 15 years on 30 October, as speculation mounts around what measures could be included.

The chancellor faces a difficult task, with the fiscal event set against the backdrop of the £22bn ‘black hole’ in public spending which she announced in late July.

Here’s your guide to some of the tax rises the chancellor could be considering for her first Budget:

Rachel Reeves has borrowed the language of the former Tory chancellor George Osborne to say her first Budget will be for “strivers” as her party faced a deepening row over the definition of “working people”.

“To these people I say, I’ve got your back.... I will deliver for you. It’s a Budget for the strivers,” she wrote in The Sun on Sunday.

The Independent’s Whitehall editor Kate Devlin reports:

“Judge us by whether, in five years’ time, you have more money in your pocket,” Sir Keir Starmer writes in a letter for The Mirror today.

The prime minister writes: “The first Labour budget in 14 years. The first budget in British history to be delivered by a female Chancellor of the Exchequer. And the first time in a decade and a half where the concerns and priorities of working people are put first.

“This is the moment that will reject austerity, chaos and decline and choose a clear path of stability, investment and reform.

“It’s no secret that for fourteen years, the Tories didn’t just run a leaky ship – they sailed it carelessly into every storm, smashing it against the rocks, and leaving the British people to pay the price.”

Sir Keir Starmer is set to deliver a harsh pre-Budget warning as he travels to the West Midlands today, outlining the “unprecedented” economic challenges the country faces.

The prime minister will say: “We have to be realistic about where we are as a country. This is not 1997, when the economy was decent but public services were on their knees.

“And it’s not 2010, where public services were strong, but the public finances were weak. These are unprecedented circumstances.

“And that’s before we even get to the long-term challenges ignored for 14 years: an economy riddled with weakness on productivity and investment, a state that needs urgent modernisation to face down the challenge of a volatile world.”

The government has announced plans to remove the exemption which saw private school not have to pay 20 per cent VAT.

The change is due to come in in January. But Ms Reeves is expected to confirm that military families, who often have to move countries and homes, will be protected from the change in her Budget.

Ms Reeves has also said she will earmark £1.4 billion to rebuild crumbling schools as she pledges to prioritise education and childcare in the Budget.

There will also be another £1.8 billion to expand government-funded nursery care. Every child over nine months is to become eligible for 30 ‘free’ hours of childcare next September.

Ministers have announced plans to strip the payments from millions of pensioners by means testing the benefit. But the move has prompted a backlash, amid warnings that some very poor pensioners are set to suffer this winter.

Read more about the pensioners affected by the winter fuel payment cuts here:

One of the consistently most unpopular taxes, despite being paid by just 4 per cent of the population. Ministers are thought to be planning to raise money from inheritance tax, possibly by making changes to a series of exemptions.

Ministers are also facing calls not to increase fuel duty, which has not risen in more than a decade.

The chancellor Rachel Reeves has changed her rules around debt, to allow her to invest in major projects. This is expected to give her up to an extra £50bn of borrowing to invest in infrastructure building such as roads, railways and hospitals.

Former Bank of England governor Mervyn King says extra borrowing could have an impact on interest rates. Asked on Sky News’s Sunday Morning With Trevor Phillips programme, he said: “Certainly if you borrow more, it doesn’t matter how you dress it up in terms of a different fiscal rule, people know that higher borrowing means higher borrowing, and financial markets and people who lend to the government will demand a slightly higher interest rate to compensate for the higher amount of debt that they’re being asked to finance.

“It doesn’t have to be dramatic, but it certainly will put some upward pressure on long-term interest rates. I don’t think it necessarily affects what the Bank of England does today or even next year, but it certainly will have some upward pressure.

Rachel Reeves is expected to raise employer national insurance payments. Labour has pledged before the election not to raise NI, but the party insists that applied only to employees, not employers.

But critics have accused ministers of breaking their promises and planning to bring in a ‘tax on jobs’.

The chancellor is also thought to be planning to extend a freeze on the point at which people start paying income tax, or have to pay higher rates. Freezing the level means that over time inflation drives more and more people into paying higher rates.

Four people were arrested on Saturday during far right and anti-racism counter-protests as organiser Tommy Robinson missed his own event after being remanded in custody.

Two arrests took place at the far-right protest organised by Mr Robinson, 41, real name Stephen Yaxley-Lennon, where demonstrators displayed anti-immigration placards.

Around midday, thousands of Mr Robinson’s supporters gathered in central London, marching from Victoria Station to Parliament Square.

Among the messages were signs reading “Two tier Keir fuelled the riots”, alongside calls to “Bring back Rwanda” and “Stop the Boats”. Some demonstrators were seen holding cans and glasses of alcohol.

The Metropolitan Police reported that two individuals from Mr Robinson’s protest were detained on suspicion of breaching Public Order Act conditions and another on a racially aggravated public order charge. Meanwhile, a counter-protest organised by Stand Up to Racism, encouraged by calls for a “massive anti-fascist demonstration”, saw thousands rallying in the capital.

Read the full story here: